11.11 – Why Singles’ Day is the Asian Dragon of eCommerce in the East

Singles’ Day has grown from a small and ironic event to the biggest shopping event in the world and has helped Chinese online trading to great popularity, efficiency and innovation. The annual event that outpaces US online sales on Black Friday and Cyber Monday combined merges pop culture, entertainment and shopping, and sets a new global standard for eCommerce. 2018’s extravaganza saw an astonishing $30.8 billion in total sales – smashing through last year’s record with ease. Here is why this mega-shopping event is a showcase for retail innovation.

Across most of the Western world, we’re familiar with Black Friday, marking the start of the US festive season holiday spending, where floods of customers pour into retailers to grab great deals among a bonanza of discounts – but also very popular in countries worldwide like Brazil. More recently, the concept of Cyber Monday has also started gaining traction, taking place on the following Monday to Black Friday, and giving online customers a chance to enjoy more great discounts.

But you may be surprised to discover that there’s an even bigger eCommerce event, so far mainly confined to China, but which sees online retail volumes that are double the combined volumes of Black Friday and Cyber Monday! This astonishing ‘Asian Dragon’ of eCommerce is Singles’ Day, which takes place on the 11th of November every year.

Starting informally in the 1990s, Singles’ Day was a low-key affair, a fairly ironic celebration for young, busy Chinese students and professionals, as a counter-culture rejection of the sugar-sweet holidays for couples and families. Even its date – 11/11 – was a tongue-in-cheek reference to the Chinese saying ”bare branches”: slang for Chinese bachelors, but also because the number “1” resembles an individual who is not in a partnership.

But in 2009, Alibaba’s subsidiary Taobao COO Daniel Zhang (who today is Alibaba’s CEO and the man earmarked to succeed Jack Ma as Chairman when he steps down) jumped on Singles’ Day as an opportunity to ignite China’s nascent eCommerce landscape and draw people to the company’s new shopping platform T-Mall.

In its first year, 27 brands participated, but it struck a chord with consumers, and started growing in scope with each passing year. Zhang and his team started receiving high acclaim for taking a fairly obscure holiday and evolving it into the nation’s largest shopping festival. Singles’ Day became the catalyst for a rapid transformation in the way Chinese consumers search, choose and buy their products. At the same time, he helped to put Alibaba on the map as one of the world’s major retail powerhouses.

This graph shows very impressively the strong growth dynamics of Singles Day in the last years. Will Alibaba and Co. succeed in maintaining these growth rates? (Source: TechCrunch / Alibaba)

Singles’ Day – a shopping event that made e-commerce more successful and efficient

The idea was simple: a little “retail therapy” can go a long way to dispel any feelings of loneliness for those still searching for their soulmate, as the world gears up for a time of holidays and family and being around loved ones. It’s a time for people to ‘spoil themselves’. Singles’ Day reminded everybody that they don’t need to wait for someone to buy them that big, exciting gift … that they can get it for themselves. While everyone else is doing it on the same day, shoppers are absolved of any ‘post-splurge’ guilt that they may feel!

Forbes reports that Singles’ Day sees more eCommerce volumes than all-but four countries do in a year. Other than China itself, only the US, UK, Germany and Japan sell more online annually, than China sees on just this one day! Just how big is it? Well, in this year, over $30.8 billion in goods were sold just on Alibaba’s platform alone. This represents an increase of a whopping 27 per cent over the previous year. It got off to a strong start with sales hitting $1 billion in one minute and 25 seconds.

The massive spikes in volumes forced Alibaba and other major eCommerce players (such as the JD Group) to scale out their technical and Cloud-based infrastructure, evolve their payments platforms and think-up new ways to handle the delivery logistics at scale. At certain times during 2017’s event, 325,000 transactions were happening every second, reports TechCrunch. The dragon is well-and-truly awake, alert, and breathing fire!

“11.11” – Singles’ Day has now been renamed

Now in its 10th year, Singles’ Day is morphing into a broader affair – pulling in many of the world’s major global brands as they vie for Chinese consumers’ attentions. In total, 180 000 brands participated in 2018 (a far cry from the 27 of 10 years ago). It’s spreading beyond just Chinese borders, as it starts to gain traction in the likes of Taiwan, Hong Kong, and across much of Southeast Asia.

Fittingly, it’s undergoing a total re-imagination: from Singles’ Day to the “11.11 Global Shopping Festival”, as Alibaba called it this year.

Source: Alibaba Website

Providing a glimpse into the shopping experience of the future

But, other than the sheer scale of the event, just why is Singles’ Day such a noteworthy day for merchants worldwide?

Firstly, it’s not all about shipping more and more products at irresistible prices. It has spurred new thinking in the retail sector, as savvy marketing professionals create engaging campaigns that not only drive sales, but increase brand affinity and draw customers into exciting new experiences.

New location-based mobile services, virtual reality apps and things like ‘smart mirrors’ help to immerse consumers in the event in a far richer way than stock-standard online shopping – elegantly merging the worlds of entertainment and shopping.

Imagine fashion shows where consumers can instantly ‘try out’ and buy the latest outfits for the season, as they are paraded down the runway; or fun-filled augmented reality games (think ‘Pokemon Go!’) that give game players unique opportunities to unearth great shopping deals hidden within the gameplay. Or look at the innovative examples set by Maybelline, where you can ‘virtually’ try on different shades of lipstick, through its augmented reality app. It’s just one of the many companies pushing new boundaries, and blurring the physical and digital realms. So it is that this originally ironic event now gives us a glimpse into the shopping experience of the future.

As Alibaba notes in its video documenting the rise of 11.11, it’s “become like the Olympics or the Superbowl – a must-do event for marketers, where brands pulled out all the stops to wow Chinese consumers”.

The 11.11 Festival taps into popular culture in interesting new ways – with national television galas defining the current pop-culture trends, and drawing big-name global celebrities like Daniel Craig, Pharrell Williams, Nicole Kidman and David Beckham for instance. Up to 200 million Chinese shoppers tune-in for these shows, gathering together and turning the evening before 11.11 into a national event.

All of this pushes payments to the forefront. Not only do retailers need to cater for incredible payments volumes, but they must cater for a wide variety of different payment preferences – from online shopping, to in-store shopping, through to the likes of mobile wallets. For instance, Alibaba entices customers to get great offline deals when they use their Alipay e-wallet to pay at a malls.

But as the first decade of 11.11 draws to a close, just what’s in store for the next decade? How will the Day continue its exponential, explosive growth?

Alibaba and its Chinese peers will certainly have to continue innovating. We’re entering the next decade against the backdrop of US-Sino tariff wars, and a saturating eCommerce market where growth can surely not continue at the trajectory of the past few years.

So just how will they keep 11.11 on top of the world?

Firstly, the day is being extended to become a 48-hour shopping extravaganza, pulling in an entire ecosystem of players – including mobile networks to offer free data connections to the shopping sites, and logistics players using advances like drone technology to ensure rapid delivery of goods.

It’s also desperately trying to gain broader appeal in areas beyond China, Hong Kong, Taiwan and Southeast Asia, as over 60 000 brands participated in 2018, and shoppers from over 200 countries went on the hunt for great deals. While it may not yet have become mainstream in Europe and the Americas, expect the day to start filtering into the mainstream over the coming years.

As the likes of Alibaba build up a huge treasure trove of data insights into what drives consumers, and what trends and fashions are hottest, the company is able to layer advanced AI tools atop this data, building up rich perspectives of what drives the Chinese economy. In fact, the South China Morning Post believes this data can be used to help solve not only business problems, but broader social problems as well. The article says that powerful data insights could, for instance, “help improve traffic flow, predict medical needs in a hospital and even ease congestion at the Beijing Capital International Airport, which is notorious for its flight delays.”

Jack Ma, executive chairman of the Alibaba Group about 11.11: “This is the day we exchange ideas, innovation, invention, and creation” [Source: Wikipedia]

The real story of 11.11 – setting the tone for shopping innovation

Alibaba will also continue on its mission of fluidly connecting the worlds of online and offline retail – a strategy it terms ”new retail” – with things like its chain of grocery stores called Hema, where users are able to go in and shop, with payments automatically processed by their phone.

This kind of ‘checkout-less’ retail experience is creating new challenges for payments companies, as we have to find ways of connecting advanced camera systems, with artificial intelligence, big data, and payment processing platforms. It’s a fascinating, never-ending journey towards a future where payments becomes so embedded in our daily activities, that it’s almost completely invisible.

If anything, that’s the truly amazing story of 11.11. It’s not so much about the record-breaking sales volumes or its expansion around the world, but about the way that it spurs new innovations and gets every player in the ecosystem thinking in a new paradigm.

It’s what Alibaba Chairman Jack Ma means when he said “I never think this is the day for selling products; this is the day we exchange ideas, innovation, invention, and creation.”

It seems that 11.11 will continue setting the tone for shopping innovation – both online and offline – in the coming years.

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The Editorial Team supervises the Blog and manages the topics that appear on it. Sometimes the team also blogs their own short posts, for example to introduce new videos powered by Wirecard or other elements that show the Future of Payment.